Hertz Is Selling 20,000 Used EVs Due To High Repair Costs

I initially read the headline as referring to maintenance costs, but it's actually because people who rent EVs were using them under the rent to gig economy business they had. As in, people would rent cars to go do Uber Eats deliveries and such, as the EVs weren't being rented as often as expected from regular rental business. The people who rented these EVs were more likely to damage the vehicle than people who rented gas cars, and the repairs for that damage were more costly to fix.

There wasn't a great explanation as to why the EV rentals were more likely to get into accidents, but it's possible that the EVs were more confusing to operate, or more likely to be driven more aggressively due to the acceleration and performance. It's also possible that the EV models they had were more prone to other issues, like blind spots, worse breaking, or insufficient self-driving, but they didn't seem to distinguish between different makes and models as being more prone to damage.

Apparently it’s related to “expenses related to collision and damage” and they’ve had to put speed and torque limitations on the fleet cars.

https://www.reuters.com/business/autos-transportation/hertz-sell-about-20000-evs-us-fleet-2024-01-11/

Telsas and Polestars are not slow cars, and it sounds like renters are driving them aggressively. I wouldn’t be surprised if torque and speed are also the reason why Tesla is #1 with recent car accidents stats.

It hertz just reading this.

I appreciate that this article isn't going for the "electric cars are bad see even hertz can't make them work" angle, and instead has more of a "someone left a chair on the curb if you have any interest" vibe

It's all Tesla and I do not want to be associated in any way with that whiny little bitchbaby Musk. Hard pass.

Some of the used EVs are rather affordable—the cheapest Model 3 is just $20,125. A long-range Model Y will cost a fair bit more than that, although even here, the most expensive one for sale by Hertz is just $38,116. As a reminder, there is now a tax credit of up to $4,000 available when buying a used EV that costs less than $25,000, assuming one meets the income caps.

But they are all ex-rental cars, and that means most of these cars have had relatively hard lives and now have plenty of miles on them—the cheaper Model 3s are all closing in on 100,000 miles. Not all of them, though—in New Orleans, there's a Kia EV6 up for sale with just under 5,000 miles.

Who is going to pay upwards of $20,000 for a car with nearly 100,000 miles on it?

This does not entirely surprise me. When Tesla became well-known a significant fraction of taxi services in my country switched to Tesla. Why: a) it was cheaper to buy since subsidies for EVs, b) electricity being cheaper than fuel, and c) Tesla being perceived as luxury.

Within a couple years most taxi services had gone back to ICE cars. The Teslas had inferior build quality, and repair turnaround time was awful compared to regular ICE cars. This meant a large fraction of the Tesla fleet was idle as they were waiting to be repaired.

I wouldn't be surprised if Hertz encountered the same. It's not that EVs are bad. It's that the largest supplier of EVs in the West, Tesla, is bad and slow to repair cars.

Ya think they would get some sort of a deal (federal or business) when it comes to repairing a fleet of EVs.

This is the best summary I could come up with:

After announcing big plans to purchase tens of thousands of EVs from Tesla and then Polestar, it's now liquidating a third of that fleet, the company told investors.

After Hertz went bankrupt during the early days of the pandemic, its big EV ambitions began in 2021, when the company revealed it wanted more than 20 percent of its rental fleet to be electric by 2022.

By early 2023, it was still far short of the ambitious goal, in large part due to Tesla's inability to actually fill that order in time, and EVs still represent just 11 percent of the total Hertz rental fleet.

But it may not actually be that upset at falling short—it turns out that the electric rental cars haven't been the panacea it needed.

At the end of Q3 2023, Hertz told investors that significant price cutting during the year had "resulted in lower EV residual values, increasing vehicle depreciation expense and negatively impacting salvage cost."

As a reminder, there is now a tax credit of up to $4,000 available when buying a used EV that costs less than $25,000, assuming one meets the income caps.

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